Uncertainties in the global economy, rising interest rates and inflation may have led to a slowdown in leasing and rental activities in the island city.
Uncertainties in the global economy, rising interest rates and inflation may have led to a slowdown in leasing and rental activities in the island city. But sub-markets in the Bandra-Kurla complex (BKC), and the western and eastern suburbs have seen a marginal growth of 1%.
According to the Jones Lang LaSalle report, the net take-up of A grade office space was 2,13,025sqm in 3Q11, over 65% of which was attributed to pre-commitments in buildings that were completed in the quarter. Pre-commitments accounted for just 23.0% of the transactions recorded in 3Q11, indicating a preference by occupiers to move in to office space that is already operational rather than upcoming.
Accounting for over 30% of the quarter’s net absorption, the central sub-market saw healthy leasing activity, primarily in the Indiabulls Finance Centre and One Indiabulls Centre. The notable leasing transactions included RBS’ lease of 6,503 sqm at Maker Maxity, that by Stylus Business Centre of 3,716sqm at R Tech Park, Future Generali’s lease of 3,902sqm at Indiabulls Finance Centre, Cognizant’s lease of 14,865sqm and that by Ness Technologies of 5,203sqm at Mindspace 1 Buildings 5 and 6.
Thane and Navi Mumbai sub-markets saw stable rents, while those in the BKC, and the western and eastern suburbs registered a rise of just over 1%. “Given the looming uncertainty of a double-dip recession in the US and European economies, along with other adverse macro-economic factors such as hikes in interest rates by the RBI and inflation, financial indicators in the Mumbai office real estate market remained stable,” it stated.
About 354,493sqm of office space across 12 office buildings in 3Q11 led to a rise in total stock in Mumbai to 6.5 million sqm, with an overall vacancy rate of 19.8%. The major completions in Mumbai in this period include the Hindustan Unilever Building, with 14,377sqm in Churchgate, Crescenzo (upper floors), adding 39,298sqm in BKC, Times Square, with 92,903sqm in Andheri (E), and Mindspace 1 Building 2, which added 32,516sqm in Airoli.
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